What Exactly is No-Fault Car Insurance?

Did you know that the state of New York requires every motor vehicle policy of insurance to provide for no-fault coverage? Also known as Personal Injury Protection (PIP), no-fault car insurance coverage provides for the payment of medical expenses and loss of wages when you are injured in a car accident. It covers all those involved in the accident including the driver, all passengers, and a pedestrian or bicyclist that was struck by your car.

No-fault car insurance explained

Nationwide states that because this plan covers you regardless of who is at fault, it is set apart from other types of auto insurance like comprehensive, collision, and liability. These car insurance plans only reimburse for damages depending on who is determined to be “at fault” in the accident. As long as the accident is covered within the terms of your policy, no-fault coverage pays for medical bills, income losses and other related expenses incurred by you or your passengers (after your deductible, and up to your covered limit).

New York state requirements

In New York state, the minimum mandatory amount of PIP on every policy written is $50,000.00, an amount that has not been increased since 1975. This means that if you go for the minimum, the most your insurance company will pay out for medical bills and loss of wages will be $50,000.00. If you were in a serious accident and need to be hospitalized for a period of time, this is not a lot of coverage and can be exhausted quickly.

The mandatory lost wage reimbursement under the mandatory PIP benefits in New York is 80% of your gross earnings up to $2,000.00 per month. It’s important to note that any disability payments that are payable to you from New York State, will be deducted from this amount.

Different ways to get more coverage

Since the mandatory minimum amounts of PIP on your policy in New York do not offer a lot of coverage, you may want to explore different options. In addition to the mandatory minimum PIP benefits of $50,000.00, you can purchase increased no-fault benefits known as Additional Personal Injury Protection (APIP), as well as Optional Basic Economic Loss protection (OBEL), both of which will provide you with higher limits of no-fault coverage.

Typically, APIP can be purchased in increments of $50,000.00 up to $100,000.00 which is then added on top of your mandatory PIP. These benefits work the same way as your mandatory PIP does and can be used for medical bills and wage loss reimbursement. Another benefit to APIP is that you can also increase your wage loss reimbursement to $3,000.00 or $4,000.00 per month with this coverage. The other supplemental insurance OBEL can only be purchased in the amount of $25,000.00. OBEL can be used for loss of wage reimbursement, physical or occupational therapy, and rehabilitation after the mandatory PIP amount has been exhausted.

With all of these combined, the most amount of total no-fault coverage you can get is $175,000.00 which includes the mandatory $50,000.00, the APIP $100,000.00, and the OBEL $25,000.00.

Review your car insurance policy

It is a good idea to take out your car insurance policy and review it to make sure that you understand and are comfortable with your current coverage. Reviewing that with a trusted attorney like the North Shore Injury Lawyer Mark T. Freeley is a great way to ensure you understand your options as best as possible. With over 30 years of experience fighting insurance companies on behalf of his clients, Mark is ready to help.  If you have any questions about your car insurance policy, give him a call at 631-495-9435 he will happily guide you through the choices, for free.